Don’t blame us for classified ad decline in newspapers: Google

Google reiterated on Monday that it is passing on the vast majority of money advertisers pay the Search engine giant directly to Australian publishers and it should not be blamed for classified ads decline in newspapers.

The company said it does not object to the idea of an Australian Code called ‘News Media Bargaining Code’ to oversee relationships between news businesses and digital platforms.

“We have already made agreements to pay publishers for content through a licencing program and several Australian publishers have come on board.

“But what we don’t agree with is a law that’s totally unworkable from a product and business perspective. We know that many voices have called for changes to the current draft law,” Google said.

In a scathing attack on the Australian government’s move to increase bargaining power of media organisations over payment for inclusion of news in its services, Google last month termed the proposed changes unfair, while warning users that the new regulation will affect Google Search and YouTube.

Google had warned Australians that the proposed “News Media Bargaining Code” could even lead to their data being handed over to big news businesses.

In a new blog post, the company said large publishers have inaccurately accused it of “stealing” news content.

“We sent more than 3 billion clicks and visits to Australian news publishers in 2018 – for no charge – allowing these publishers to make money by showing their own ads, showing other articles or converting people into new paying subscribers — driving an estimated $218 million worth of value,” Google explained.

Google said it makes money from ads and don’t run ads on Google News or the News Tab in Search.

“For many years we’ve helped publishers make money by providing tools and technology that helps them sell advertising on their sites,” the company said.

In July, Google announced a series of new deals to pay to license content for a new news product going live in the next couple of months.

An analysis recently conducted for Google by the economists at AlphaBeta shows that the loss of newspaper revenue resulted primarily from the loss of classified ads to online classifieds businesses such as Domain, Realestate.com.au, Carsales and Seek.

Between 2002 and 2018, newspaper revenue fell from $4.4 billion to $3 billion.

“Of that decline, 92 per cent was from the loss of classified ads, and most of these classified revenues went to specialist online providers that target niches such as job advertisements, second-hand goods, or real estate listings. Almost none went to Google,” the company stressed.

On April 20, the Australian Government directed the Australian Competition and Consumer Commission (ACCC) to develop a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and each of Google and Facebook.

The draft code would allow news media businesses to bargain individually or collectively with Google and Facebook over payment for the inclusion of news on their services.

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